Medicine has doctors trapped from jettymd

Twenty-something millionaires on youtube frustrate me. They talk to me about finances after another 14 hour workday with 6 figures of debt. Like my co-fellows, I've been in training for almost a decade and I'm still nowhere close to having my debts paid. We are often told that it will get better once we're attendings, but more money won't solve the real problem.

The Problem - The Business of Medicine

Medicine changes fast. Healthcare costs are out of control. Insurance companies create more and more hoops to jump through. Work hours are long. As physicians, we spend 51% of our time with our computers instead of our patients. We are burnt out and there is nowhere to go. Administrative tasks grow every year. We are working longer hours. If you feel like we're not making any progress, you are not alone. Burnout is real.

Blessed as a physician, more money won't solve our problems. Learn from the most highly paid workers in the US - professional athletes. Sports Illustrated reported 60% of NBA players and 78% NFL players file for bankruptcy within five years of retirement. These players make millions of dollars each year. We must learn from their mistakes - a lack of financial education.

Meaning one out of two physicians contemplated quitting medicine during their career. I'm sure the numbers are worse for residents and fellows. We carry much higher work hours (80-120+) and have little control over our lives.

It's not difficult to imagine why so many doctors burn out:

an average of $200,000 student debt
long work hours
medical records systems that make tasks more burdensome than easier
lack of control
more administrative tasks

This list leaves us with precious few moments to do what we came into medicine to do — take care of patients. Here's the rub: we work in a profession we love and a business we hate.

Many more physicians would quit if we didn't have as much debt. If we were financially free, more physicians would be able to control their work. We would regain some leverage. We could avoid contracts with high work requirements. Of course, we still could, but we don't need the lifestyle pressures to push us into these kinds of contracts.

The Answer - Financial Education

No one taught us how to handle finances. Our education taught us about chemistry, literature, and calculus. I don't use any of these subjects in my day-to-day life. The most useful classes that I took in college were the philosophy classes. And yet, no one teaches us personal finance, except youtubers.

Financial education is the way out of this rat race. With financial education, you can be free.

Financial education has never been easier to find. The internet is filled with books, videos, and podcasts on how to manage your money. We struggle to find the time. Looking at the lives of my attendings, there will not be more time in the future. The time to learn about how money works is now because life only seems to get busier as we go. I’ve already done a post on my shortlist of books to read (here and here).

Let's start with a short playbook to get started:

Budget and reduce expenses as much as possible (be realistic)
1. free online tools like mint.com and Personal Capital can help
Set goals
1. secure retirement
2. buying a house
3. saving for a car
Build emergency fund
1. Save expenses for 3-6 months. I tend to lean towards 6 months just in case
2. Store your emergency fund in savings or checking accounts, please do not use this money to invest in the stock market. Gamble with money you can afford to lose.
Max our your employer-sponsored retirement funds like 401(k) or 403(b) funds. Put in the most amount of money that your employer will match.
1. If your employer matches up to 3% of your contribution, then put in 3%.
2. select low-fee index, non-actively managed index funds as your investment option. "Actively managed" funds mean that brokers get to make investments with your money. Not the best idea.
Pay your high-interest debts
1. Credit card debt has very high-interest rates.
2. Pay these off as soon as possible to improve your financial situation and your credit score
3. Student loans are a different beast (read more here)

Financially-free doctors are happier and better doctors. We didn't join the profession to focus so much on the money. We should learn from the young youtube millionaires. Without this focus, we may stay trapped in this profession we love but the business we hate.